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Market Failure (Definition (Sustainability (Ability of sth to be…
Market Failure
Definition
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Externality
An externality exists any time the production or
consumption of a good creates spillover benefits or costs on a
third party not involved in the market. In such cases, resources
will either be under-allocated (positive externalities) or
over-allocated (negative externalities) towards the production of
certain goods.
Merit goods
Goods that the service thinks provide positive benefit for both the people who use them and society as a whole
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Excludable
When possible to exclude people from using a good, usually by charging a price
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Common Access Resource
Not owned by anyone, do not have a price and available to anyone without payment
Sustainability
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Sustainable development meets the need of the present without compromising the ability of future generation to meet their own needs
Cap and Trade permits:
a certificate given by the government allowing a producer to pollute to a certain level that the government has decided. Under-polluting firms can sell theory permits to over-polluting ones
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